GRP Rainer LLP

Exclusion of Warranty when Selling a House: Claims for Damages Are Still Possible

Exclusion of warranty may not be effectively valid if the seller of a house has not correctly described any existing defects; therefore, as a result, the seller carries liability in cases of false representation or claims made in bad faith that are involved in the process of the sale.


Cologne, NRW -- (SBWIRE) -- 07/08/2013 -- GRP Rainer Attorneys and Tax Accountants in Cologne, Berlin, Bonn, Bremen, Düsseldorf, Essen, Frankfurt, Hamburg, Hanover, Munich, Nuremberg, Stuttgart and London explain: In its judgment from 15 January 2013 (No.: 4 U 874/12), the Koblenz higher regional court decided in favour of the purchaser of a home with marten infestation of the roof. The seller had made the representation at the time of purchase that no hidden defects of the house were known to them. Nevertheless, the buyer discovered some months later that there was damage to roof insulation which had been caused by the pitting of martens and raccoon feces.

The objection made by the seller was that they had made a partial reconstruction of the roof and it was assumed that the damage had been fixed. The Koblenz regional higher court held to the contrary that such extensive devastation caused by the martens which had causing noise for approximately one year in the roof was so obvious that the seller, in making the partial reconstruction, had at least the thought that it was possible that the entire roof was infested. The seller, therefore, was obligated to submit such a fact to the buyer with such knowledge so that the buyer would have had the opportunity to reconsider the purchase.

Although a warranty within the framework of the contract of sale was excluded in this particular case; however, this provision cannot protect the seller from claims for damages from the purchaser. The seller cannot rely on an exclusion of warranty if a defect has been fraudulently concealed by the seller or a guarantee was provided for the condition of the item that was sold.

As a seller, however, especially when selling real estate, legal coverage and protection should always be included as part of making the sale. In the case that such a warranty exclusion is not legally effective or is not appplicable due to some other reason can have devastating consequences in hindsight.

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GRP Rainer LLP is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Essen, Frankfurt, Hamburg, Hannover, Munich, Stuttgart, Bremen, Nuremberg and London UK.

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